NATIONAL AFFAIRS: $16 billion education fiasco traps Julia Gillard

by Peter Westmore

News Weekly, April 3, 2010

As the fiasco surrounding the Federal Government's multi-billion dollar home insulation affair widens, there is mounting criticism of the Government's $16 billion school infrastructure program, part of the Government's economic stimulus plan.

The school improvement plan operates under the Orwellian title, Building the Education Revolution (BER).

In some cases, state education departments are alleged to be charging the Commonwealth Government inflated sums for relatively small-scale projects.

Among other cases, minor refurbishments of the Pleasant Hills Primary School near Wagga have been quoted at $275,000, including GST; $900,000 is being charged for a government-provided prefabricated library at Berridale State School, in southern New South Wales; $200,000 to a government-approved contractor to move a sewer and stormwater drain at Berwick Lodge Primary School in Victoria; and nearly $900,000 for a two-room prefabricated concrete building, supplied by the State Education Department to Eungai Public School, in northern New South Wales.

The local Parents & Citizens (P&C) group at Eungai raised their concerns in the NSW local newspaper. A spokesman for the P&C, Mark Shepherd, said: "The two catch-cries of the BER program are 'true value for money' and 'total transparency'; but, hang on, how does a pre-fabricated concrete building cost $900,000?"

He added, "We were promised like for like with our old demountables, but some of the things promised like solar panels, all-weather access, covered walkways and new whiteboards won't be forthcoming.

"Our old demountables, which had all-weather access and interactive whiteboards, will disappear. What was supposed to be a net gain will actually end up being a loss." (The Macleay Argus, March 16, 2010).

The New South Wales Teachers Federation, which has been a strong supporter of the Rudd Government, is so alarmed that it has officially approached the NSW Auditor-General, asking for an independent public inquiry into the scheme.

Stating that it is concerned about "overpricing, waste and mismanagement", the Federation's general-secretary, John Irving, said, "Principals, teachers and parents have raised concerns that some BER projects are costing more than the original estimates and far more than regular construction costs.

"There is much speculation that builders' mark-ups, management fees and multi-layered bureaucracy are greatly inflating the cost of work under the BER."

He added, "It appears ... that management fees will account for up to a quarter of the state's $3.4 billion BER funding.

"It appears that problems of overpricing and excessive management fees are systematic rather than isolated. Accordingly, the Federation is calling for a public inquiry into the way the BER is being implemented."

The NSW Teachers Federation's deputy president, Gary Zadkovich, told the Sydney Morning Herald that the Federal Government had declined to negotiate on how the program was to be implemented. This meant that school communities were rushed into making decisions, and many were forced to accept alternatives that did not match their needs.

He said: "These initial problems have been compounded by concerns about overpricing, inflated quotations and tenders, and directions by the Department of Education that prefabricated buildings would be supplied instead of bricks and mortar construction.

"Just as we have seen in the Federal Government's home insulation program, we are seeing speculation about companies profiteering from these programs and speculation about state governments skimming funding that should be spent on schools."

Many school communities believed that costs associated with their projects were massively inflated.

"A school may receive an $850,000 trucked-in prefabricated classroom or library when it knows a fully-furnished brick home would cost half that," Mr Zadkovich said. "There are too many reports of these sorts of problems for them to be ignored."

One NSW principal e-mailed, "I am sitting here staring at my beautiful new $425,000 library that cost the taxpayers of Australia $850,000. The internet is not connected - the fans can't be turned on because they hit the ceilings, and the light switches are upside down."

The BER program was defended by federal Education Minister, Julia Gillard.

Like the federal Environment Minister Peter Garrett before her, she told federal parliament that, to date, over 100 NSW school projects had been independently audited.

Although Julia Gillard has been described as a future Labor Prime Minister, the concerns over the scheme are such that they could damage her reputation, just as the home insulation fiasco has virtually destroyed the career of the Environment Minister.